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Allakos (NASDAQ:ALLK) shares were up 16% in afternoon trading Wednesday after JMP initiated coverage of the stock with a market outperform rating.
JMP said it liked the company’s “novel biology,” noting that Allokos’s lead drug lirentelimab is targeting two indications with high unmet needs, chronic spontaneous urticaria, or CSU, and atopic dermatitis, or AD.
The investment bank added that near-term Phase 2 readouts could drive shares higher. It sees a 30% probability of success for the drug in CSU and 20% in AD. JMP estimates the drug’s peak penetration opportunity at around $1B for CSU and $1.9B for AD.
JMP set a price target of $11 for the stock.
